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Sunday, March 18, 2012

Green growth sounds nice, but can it deliver?

"The difficulty lies not in the new ideas, but in escaping from the old ones "

John Maynard Keynes

A new UNCTAD Discussion Paper (No. 205) written by Ulrich Hoffmann reviews the fallacies of green growth in coping with climate change and the implications for development space.The main results of the analysis can be summarized as follows:
Many economists and policy makers advocate a fundamental shift towards “green growth” as the new, qualitatively-different growth paradigm, based on enhanced material/resource/energy efficiency and drastic changes in the energy mix. “Green growth” may work well in creating new growth impulses with reduced environmental load and facilitating related technological and structural change. But can it also mitigate climate change at the required scale (i.e. significant, absolute and permanent decline of GHG emissions at global level) and pace?

The UNCTAD Discussion Paper argues that growth, technological, population-expansion and governance constraints as well as some key systemic issues cast a very long shadow on the “green growth” hopes.

The focus on green growth is largely a re-packing of the 25 years old sustainable development, of which we heard a lot but seen very little. It may rather give excuses to do nothing really fundamental that can bring about a U-turn of global GHG emissions. The proponents of a resource efficiency revolution (called eco-efficiency, factor 4 or factor 10 or lately simply green growth) need to scrutinize the historical evidence, in particular the combined effects of economic and population growth.

Furthermore, they need to realize that the required transformation goes beyond innovation and structural changes to include democratization of the economy and cultural change.

Climate change calls into question the global equality of opportunity for prosperity (i.e. ecological justice and development space) and is thus a huge developmental challenge for the South and a question of life and death for some developing countries, and a question of global solidarity for the others.

Now, this should not be taken as if I would be against all the good new green innovations, such as organic farming, solar energy, electric cars etc. But it is important to realize that our challenges go beyond what can be fixed with a few technological changes and consumer choice in a market economy. This is clearly seen in the case of organic farming. It has grown tremendously in the last 25 years, but still only represent one percent of the global food market. The underlying drivers of the capitalist economy works in the other direction, and the consumers who pay extra for organic products are paying for market failures in the lingo of neo-liberals, but I would call it policy failure or even more dramatic:

2 comments:

Yes, as long as the mainstream development is all about business-as-usual, the green growth will never become more than a niche, an exception. And I also belive that in the long run, the green alternatives will have serious problems to survive. They will be forced to copy the mainstream development, as we do see in organic farming, or just die.